Avianca Holdings S.A. (AVH ) (BVC: PFAVH) today reported its
financial results for the third quarter of 2016 (3Q 2016). All figures
are expressed in millions of US dollars unless otherwise stated. The
information within is presented in accordance with International
Financial Reporting Standards (IFRS). The reconciliation between IFRS
and non-IFRS financial information can be seen in the financial tables
section of this report. Except when noted, all comparisons refer to
third quarter 2015 (3Q 2015) numbers. Figures and operating metrics of
Avianca Holdings S.A. ("Avianca Holdings" or "the Company") are
presented on a consolidated basis.

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Operating income (EBIT) increased in the third quarter 2016, reaching
$83.4 million, with an improved operating margin of 7.9%. This
represents a 36 bps(1) quarter on quarter increase resulting
from efficiencies derived through the Companys expense reduction
program and revised hedging policy. Further, operating revenues(1)
reached $1.1 billion for the quarter.

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These results were primarily driven by a 3.1% reduction in total
operating costs(1) as the Company benefited from its revised
fuel hedging strategy and leaner cost structure. This was partially
offset by a 7.6% decrease in non-passenger revenues(1) and a
slight reduction in passenger revenues (1.7%).

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For the 3rd quarter of 2016 yields reached 8.8 cents, a
7.4% increase when compared to the yield of 2Q 2016. This represents
Aviancas first quarter over quarter yield increase since the second
quarter 2014. This trend was supported by an increase of 5.9% in third
quarter 2016 traffic numbers (RPKs) when compared to the same quarter
last year.

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Cost per available seat kilometer (CASK(1)) decreased 6.0% to
8.2 cents in 3Q 2016, compared to 8.7 cents in 3Q 2015. This was
primarily driven by lower jet fuel prices, which decreased by 10%
during the quarter, as well as by a 16.6% year on year reduction in
maintenance and repairs expenses. In addition, Aviancas cost control
initiatives continue to yield efficiencies. CASK ex-fuel(1)
therefore declined 0.5%, to 6.4 cents.

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EBITDAR for the 3Q 2016 was $229.1 million, while the EBITDAR margin
reached 21.6%; a 118 bps(1) increase when compared to 2015.

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Aviancas leverage position (Net Adjusted debt to EBITDAR) decreased
to 5.99x from 6.79x on December 31, 2015, as the Company reduced its
total debt by $224.6 million in conjunction with an improvement in
profitability.

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Capacity, measured in Available Seat Kilometers (ASKs), increased 3.1%
during 3Q 2016, primarily due to the annualized effect of the
international capacity deployed to Europe during 2015. The Company
continued to see robust traffic numbers on its international routes,
particularly to Europe, South America and North America. Passenger
traffic, measured in Revenue Passenger Kilometers (RPKs), increased by
5.9%, reaching a consolidated load factor of 83.5% across the network.

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Between July and September, the Company took delivery of one
sharklet-equipped A319 and two new wide-body B787-8 aircraft. Avianca
Holdings S.A. and its subsidiaries therefore ended the quarter with a
consolidated operating fleet of 177 aircraft.

CEO Message

Dear Shareholders,

While we continue to experience some political and macroeconomic
uncertainty in several markets throughout Latin America during the third
quarter of 2016, Avianca benefited from welcome oil price stability as
well as exchange rate steadiness in key markets. These positive
developments allowed Avianca to adjust its pricing strategy, providing
our customers with improved predictability in terms of travel
expenditures and purchasing power when abroad.

Said stability has fueled renewed demand on both the international and
domestic fronts. Growth in terms of ASKs has been leveled throughout our
network, at around 3%, as the annualization effect of last years
capacity deployment diminishes. As a result, passenger traffic numbers,
measured in RPK, grew by 5.9% when compared to the same period in 2015,
driven by steady demand in our home markets and strong sales for our
international routes. In particular, the services from Bogota to Buenos
Aires, Los Angeles, London and Madrid all registered load factors above
85%. As such, the 83.5% load factor registered this quarter across the
network is the strongest since the integration between AVIANCA and TACA.
Similarly, due to the particularly strong demand for our routes to and
from Spain, we decided to substantially increase frequencies to the
Iberian Peninsula, from 21 to 35 weekly frequencies, in order to best
respond to our customers needs.

In line with the fleet plan we established at the beginning of the year,
we have incorporated three brand new aircraft: one sharklet-equipped
single aisle A319 and two wide body B787-8. We therefore ended the
quarter with an operating fleet comprised of 177 aircraft.

Apart from the positive trends were seeing across our network, we were
also able to achieve several important corporate milestones during the
third quarter. We began operations at our Maintenance, Repair and
Overhaul (MRO) facility in Rio Negro, which positions Avianca at the
forefront of international aeronautic maintenance industry. With an
investment of more than USD50 million, Aviancas MRO not only allows for
simultaneous maintenance of up to five single aisle aircraft but also
ensures significant improvement in future cost control.

Avianca also achieved a 3.1% reduction in Operating Costs(1)
this quarter, in line with our ongoing effort to streamline our cost
structure throughout the organization. Said reduction was mainly driven
by a decrease in maintenance and repairs as well as in crew training
expenses.

Further, our LifeMiles loyalty program achieved solid results during the
third quarter. Its cobranded credit card base increased by 22.3%,
reaching a total of 520,000 credit cards by quarters end. As a result,
the program ended the quarter with 6.9 million members, which represents
an 8.9% year on year increase. On October 19, 2016, LifeMiles signed a
new partnership with Grupo Bancolombia, one of the leading franchises in
Colombia and Central America, with over 11 million clients and USD 54.5
billion in total assets. This partnership is an important step in
consolidating the loyalty programs position within the region. It
allows our new clients from four new markets to accumulate and redeem
their miles across the entire Avianca network.

The milestones I have described, combined with our successful strategy,
have resulted in a profitable third quarter for Avianca. The Company
reported USD 1.1 billion in revenues(1) this quarter, while
operational costs(1) decreased by 3.1% to USD 978.8 million.
Avianca therefore recorded a 7.9% operating margin (EBIT) for the third
quarter 2016. As a consequence of said profitability and in line with
the Companys efforts to reduce its debt burden Avianca decreased its
total debt by $224.6 million over the last nine months, resulting in an
adjusted net debt to EBTIDAR multiple of 5.99x.

Avianca also made important progress related to its organizational
restructuring this quarter, eliminating the complexity of our reporting
structure and redefining upper and middle management positions. Our new
team looks forward to addressing any other new challenges that may lie
ahead.

Along these lines, it is with great pleasure that we announce that
Roberto Held Otero has joined Avianca Holdings as our new CFO, and
assumed his new position on November 1, 2016. Prior to joining Avianca,
Roberto was CFO of PROCAFECOL S.A., which markets premium Colombian
coffee and manages the Juan Valdez brand worldwide, where he led and
improved financial processes automation and efficiency. Before that he
spent over 13 years in senior capital markets positions with Citigroup
and the Bolsa de Valores of Colombia. Given his considerable work
experience and specific skillset in this area, I am confident that
Roberto will be an invaluable asset to Avianca.

Gerardo Grajales, who led the Companys Finance team for the past 14
years, will now be heading Aviancas new strategic business unit. Said
department will focus on developing and strengthening Aviancas
different business units, such as LifeMiles, Avianca Cargo, Deprisa, and
Avianca Services among others. Id like to take this opportunity to
thank Gerardo for his commitment and achievements which have transformed
Avianca into a strong, well regarded and more profitable company- both
domestically and internationally.

Finally, as we prepare for the fourth quarter 2016 peak season, we
reconfirm our EBIT margin guidance set out at the beginning of 2016 of
5.5% - 7.5%. While we reaffirm our commitment to providing Aviancas
customers with best in class service, we also will continue to focus on
generating profitable growth for all of our stakeholders.

(Adjusted: Excluding non-cash Fx charges, gain or loss on
derivative instruments and special items associated to one-time
expenses described in footnote (1)

Management Comments on 3Q 2016 Results

Third quarter 2016 was a strong quarter for Avianca; the Company reached
an operating income (EBIT) of $83.4 million, with an operating income
(EBIT(1)) margin of 7.9%; a 36 bps(1) year on year
increase. These results were mainly driven by a 3.1% reduction in total
operating costs(1) as the Company has begun benefiting from its
revised hedging policy; reducing expenses by approximately USD 30
million when compared to 3Q 2015. The Company has also generated
important efficiencies through cost cutting initiatives, as a result
maintenance expenses(1) decreased 16.6% throughout the period.
Third quarter 2016 CASK ex-fuel(1) therefore declined 0.5%, to
6.4 cents. This was partially offset by a 2.7% decline in total revenues(1),
primarily driven by a 7.6% reduction in Non-Passenger Revenues(1).
Passenger revenues decreased by only 1.7% as compared to the same period
last year.

Total operating revenues(1) amounted to approximately $1.1
billion during 3Q 2016. This represents a 2.7% year on year decrease,
partially due to a 1.7% decline in passenger revenue, a 7.1% yield
decline, as well as a 7.6% decrease in cargoand other
revenues(1). This represents Aviancas first quarter over
quarter yield increase since the second quarter 2014. Cargo and other
revenue(1) represented 17.1% of total revenues in the third
quarter 2016. The latter was primarily driven by a 1.7% decrease in
average fare, as well as a decrease in the total tons transported
associated with lower import volumes from North America to Colombia,
Brazil and Ecuador.

The LifeMiles Loyalty Program continued to deliver strong results during
the 3Q2016, with an 11.7% increase in revenues as compared to the same
period of 2015. In terms of membership growth, the quarter ended with
more than 6.9 million members, which represents an 8.9% year on year
increase. During the same period, the retail partnership program
continued to expand, with a 6.7% increase in the number of new
commercial partners, to 303. Finally, LifeMiles active co-branded cards
ended the quarter with more than 520,000 cards, which represents a 22.3%
year on year increase.

Avianca transported more than 7.5 million passengers in the third
quarter of 2016; a 3.2% year on year increase. Traffic figures (RPKs)
increased above capacity (ASKs) resulting in a consolidated load factor
of 83.5% the strongest since the integration between AVIANCA and TACA.
Therefore, routes to Europe during September 2016 reached an average
consolidated load factor of 90.9%, and of 89.3% from Bogota to Buenos
Aires, contributing to the strong 15.9% traffic growth from home markets
to South America.

3Q 2016 operating expenses(1) reached $978.8 million; 3.1% year
on year decrease. This was primarily driven by a 19.3% decline in Fuel
Expenses associated with lower jet fuel prices and changes in Aviancas
hedging policy. Adjusted for cargo discount and for comparison purposes,
Sales and Marketing(1) expenses decreased by 3.1% as compared
to 3Q 2015. Further, Maintenance and Repairs decreased 16.6% due to the
reduction in fleet re-delivery provisions as well as a decline in engine
overhaul expenses. These results were partially offset by a 7.5%
increase in Salaries and Wages as the Company adjusted for severance
payments in line with the organizational restructuring and had an
increase in Ground Operation expenses.

As part of the Companys on-going fuel hedging strategy, a total of
104.2 million gallons of fuel were hedged at the end of the third
quarter 2016, of which 58.1 million gallons correspond to approximately
55% of the total expected volume to be consumed over 2016. The remaining
volume represents approximately 5.0% of the total expected fuel
consumption from 2017 to 2018. Coverage levels were set at $1.39 per
gallon. During 2016, hedging expenses are expected to range between $5
to $7 million per quarter, allowing the Company to cap its hedging
expenses in order to derive additional benefits from lower fuel prices
throughout the year.

In accordance with the Companys fleet plan, Avianca took delivery of
one sharklet-equipped A319 and two new wide body B787-8 aircraft between
July and September 2016. Avianca Holdings S.A. and its subsidiaries
therefore ended the quarter with a consolidated operating fleet of 177
aircraft.

The Company recorded other non-operating expenses of $47.8 million for
the 3Q 2016, compared to a non-operating income of $8.1 million for the
same quarter of 2015. Non-operating expenses include interest expenses
related to incremental aircraft debt and additional corporate debt as
well as FX gain or losses. The Company also recorded of $10.0 million in
expenses related to the foreign exchange non-cash translation
adjustments, compared to a $43.9 million gain for the same period of
2015. This effect is primarily due to a loss in foreign exchange
translation adjustments, consisting of the net non-cash gain (or loss
from) of monetary assets and liabilities denominated in Colombian Pesos,
Argentinian Pesos, and Venezuelan Bolivares subject to the USD exchange
rate.

The Companys cash and cash equivalents and available-for-sale
securities, ended the quarter at $411.3 million. Including short-term
certificates and bank deposits, adjusted cash and cash equivalents and
available-for-sale securities (other current assets) came in at $420.9
million, equivalent to about 10.3% of revenues for the last twelve
months. As of September 30, 2016 the Company valuated its cash balances
held in Venezuela at the latest DICOM exchange rate of 658.9 VEF per
1.00 USD, resulting in a cumulative loss of $4.9 million. Accordingly,
the carrying amount of cash balances held in Venezuela of $0.4 million
have been classified as cash and cash equivalents, which is expected to
be used over the next three months as part of the normal operations in
Venezuela.

In line with the Companys deleveraging strategy, as of September 30,
2016, Avianca reduced its debt burden by $224.6 million. As such
Aviancas leverage position (Net Adjusted debt to EBITDAR) decreased to
5.99x, from 6.79x on December 31, 2015. Consequently, the Companys
total long term debt amounted to $2.85 billion, while total liabilities
came in at $4.94 billion.

Full Year 2016 - Outlook

The Company will continue to execute cost saving initiatives and revenue
enhancing projects that are expected to yield results over the next two
years. As such, the Company maintains its guidance for 2016 as follows:

These may include words such as "expect", "estimate", "anticipate"
"forecast", "plan", "believe" and similar expressions. These statements
and the statements regarding the Companys beliefs and expectations do
not represent historical facts and are based on current plans,
projections, estimates, forecasts and therefore you should not place
undue reliance on them. Statements regarding future expectations involve
certain risks and uncertainties. Forward-looking statements involve
inherent known and unknown risks, uncertainties and other factors, many
of which are outside of the Companys control and difficult to predict.
Avianca Holdings S.A. warns that a significant number of factors may
cause the actual results to be materially different from those contained
in any statement with regard to future expectations. Statements of this
kind refer only to the date on which they are made, and the Company does
not take responsibility for publicly updating any of them due to the
occurrence of future or other events.

Glossary of Operating Performance Terms

This report contains terms relating to operating performance that are
commonly used in the airline industry and are defined as follows:

A

ASK: Available seat
kilometers represents aircraft seating capacity multiplied by the number
of kilometers the seats are flown.

ATK: Available ton kilometers
represents cargo ton capacity multiplied by the number of kilometers the
cargo is flown.

B

Block Hours: Refers to the
elapsed time between an aircraft leaving an airport gate and arriving at
an airport gate.

Code Share Agreement: refers
to our code share agreements with other airlines with whom we have
business arrangements to share the same flight. A seat can be purchased
on one airline but is actually operated by a cooperating airline under a
different flight number or code. The term "code" refers to the
identifier used in flight schedules. generally the two-character IATA
airline designator code and flight number. Code share alliances allow
greater access to cities through a given airlines network without
having to offer extra flights. and makes connections simpler by allowing
single bookings across multiple planes.

L

Load Factor: Represents the
percentage of aircraft seating capacity that is actually utilized and is
calculated by dividing revenue passenger kilometers by available seat
kilometers (ASKs).

Revenue Passenger: Represents
the total number of paying passengers (which do not include passengers
redeeming LifeMiles. frequent flyer miles or other travel awards) flown
on all flight segments (with each connecting segment being considered a
separate flight segment).

RPK: Revenue passenger kilometers
represent the number of kilometers flown by revenue passengers.

RTK: Revenue ton kilometers
represents the total cargo tonnage uplifted multiplied by the number of
kilometers the cargo is flown.

T

Technical Dispatch Reliability: Represents
the percentage of scheduled flights that are not delayed at departure
more than 15 minutes or cancelled. in each case due to technical
problems.

Y

Yield: Represents the average
amount one passenger pays to fly one kilometer. or passenger revenue
divided by revenue passenger kilometers (RPKs).

(1)As of the 3Q of 2016 the company improved the classification
for some of its accounts in its ERP system which have no effect on
nominal profitability and that for comparison purposes affect Cargo &
Others as well as sales and Marketing.